A pericentric chromosome 16 inversion is present in almost 100% of patients with M4Eo subtype of acute myeloid leukemia. It is also detected in other types of leukemia as well at a lower frequency. A fusion gene between CBFB, the gene for a subunit of transcription factor CBF/PEBP2 on 16q22, and MYH11, which codes for smooth muscle myosin heavy chain, is generated by this chromosome 16 inversion. We have shown that the CBFB-MYH11 fusion gene can transform NIH 3T3 cells and this transformation requires the CBFB domain for binding with its partner CBFa and the MYH11 domain for multimerization. We also found that this transformation correlates with altered transactivation of potential target genes of CBF/PEBP2 and a unique subcellular localization pattern of the fusion protein. Further analysis of the CBFB-MYH11 fusion gene and its produced protein is in progress, including further dissecting the functional domains of the protein, identification of potential interactions of the protein with other transcription factors, identification of target genes involved in the transformation, and the potential interaction with other oncogenes and/or tumor suppressor genes. A mouse model of the human leukemia is being generated through several strategies, including inserting the fusion cDNA under the control of several different promoters, and recreating the inversion by homologous recombination.